Gawker Media, the online publisher ordered to pay $140m (€124m) to former wrestler Hulk Hogan over publication of a sex tape, yesterday filed for bankruptcy protection and is planning to put itself up for sale.
The move will intensify public debate in the US over the role of big money in media lawsuits.
Billionaire investor Peter Thiel, an early backer of Facebook and a co-founder of PayPal, bankrolled Hogan’s lawsuit.
Hogan, whose real name is Terry Bollea, is listed as the largest creditor in Gawker’s bankruptcy filing.
Media company Ziff Davis already has an agreement to buy Gawker for a little less than $100m, according to sources.
However, a bankruptcy auction will ensue, likely at the end of July. If no other bidders step up with better offers, Ziff Davis will become Gawker’s new owner.
Ziff Davis, whose gaming and consumer technology websites include AskMen, Computer Shopper, and Geek.com, would expand its internet portfolio significantly with the acquisition of Gawker, gaining sites such as Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin, and Jezebel.
In the filing, Gawker said its assets are estimated to be worth $50m to $100m, whereas its liabilities are estimated at between $100m and $500m.
Gawker has vowed to appeal the verdict in the Hogan lawsuit. Yesterday, it argued it could not pay a bond on the $140m judgment.
“A high bond like that is effectively the same as not allowing the stay,” Michael Berry, a lawyer for Gawker, told the hearing.
“My client faces financial ruin. The verdict could be overturned or reduced.”
In March, a jury awarded $60m to Hogan for emotional distress and $55m for economic damages, after Gawker published in 2012 a 41-second edited video clip featuring him having sex with the wife of his then-best friend, the radio shock jock Bubba ‘the Love Sponge’ Clem.
The jury slapped another $25m in punitive damages on Gawker and its CEO, Nick Denton.
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